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Hubbell Pleads Not Guilty

Webster Hubbell, a former top Justice Department official and a close friend of both President Clinton and first lady Hillary Rodham Clinton, pleaded innocent Monday to 15 new federal charges stemming from the 1970s Arkansas land deal known as Whitewater.

"I'm not guilty," Hubbell responded when U.S. District Judge James Robertson asked him to enter his plea to the charges handed up by independent counsel Kenneth Starr's grand jury.

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Hubbell, a golfing partner of President Clinton and a former law partner of the first lady, has already served 18 months in prison after pleading guilty in another Whitewater-related case.

The former associate attorney general is accused of participating in a scheme to impede federal regulators investigating the collapse of the Arkansas savings and loan operated by President and Mrs. Clinton's business partners, Jim and Susan McDougal.

A 40-page indictment, which refers to Mrs. Clinton three dozen times, alleges Hubbell lied to federal regulators and Congress over a seven-year span ending on Dec. 27, 1995. That was nine days before the mysterious reappearance of Mrs. Clinton's law firm billing records that revealed her work on a failed McDougal development south of Little Rock called Castle Grande.

Mrs. Clinton's records turned up in the White House family residence and were turned over to Starr in January 1996, two years after they were first subpoenaed.

In testimony Thursday to the House Judiciary Committee, Starr said that "after a thorough investigation, we have found no explanation how the billing records got where they were or why they were not discovered and produced earlier. It remains a mystery to this day."

Jim McDougal and Hubbell's father-in-law, prominent Little Rock businessman Seth Ward, owned the 1,050-acre Castle Grande development, which federal regulators concluded was riddled with "insider dealing, fictitious sales and land flips."

The indictment alleges that Hubbell "falsified, covered up by scheme and concealed. . .the true nature" of the relationship between Hubbell, Mrs. Clinton and their law firm and Ward and the Castle Grande development.

The indictment accuses Hubbell of perjury, fraud, false statements and corruptly impeding the functions of the Federal Deposit Insurance Corp. and the Resolution Trust Corp.

The failure of the McDougals' S&L has cost taxpayers $65 million. Regulators estimate $3.8 million in damages to the S&L from the Castle Grande transactions.

Earlier this year, Starr had also secured an indictment against Hubbell on tax-evasion chages; those were thrown out on the grounds that Starr went beyond his jurisdiction as independent counsel.

Hubbell's attorney, John Nields, said he planned to try to have six of the current charges dismissed, maintaining they were covered under a 1994 plea agreement.

Hubbell has known the Clintons since the president was governor of Arkansas and Mrs. Clinton worked at the Rose Law Firm in Little Rock. He came to Washington when Clinton was elected president and took the No. 3 job in the Justice Department.

When indicted this time, Hubbell said if Starr's intent was to get him to tell something incriminating about the Clintons, he would fail.

"I don't know of any wrongdoing by the first lady or the president," he said at the time. "Nothing the independent counsel can do to me is going to make me lie about them."

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